Saturday, September 17, 2011

Privatization Loses Money

Great new study by the Project on Government Oversight (POGO). More real-world, empirical evidence that privatization does not save money. We're simply shifting money from good-paying jobs (public sector) for services we need, to low-paying private sector companies that charge more, yet only a select few at the top of the organization share in the majority of the bounty. We're paying more to privatize public sector work based on the MYTH that it's costing us less to have it done by a private organization.

"This report proves otherwise: in fact, it shows that the government actually pays service contractors at rates far exceeding the cost of employing federal employees to perform comparable functions."

"POGO estimates the government pays billions more annually in taxpayer dollars to hire contractors than it would to hire federal employees to perform comparable services. Specifically, POGO’s study shows that the federal government approves service contract billing rates—deemed fair and reasonable—that pay contractors 1.83 times more than the government pays federal employees in total compensation, and more than 2 times the total compensation paid in the private sector for comparable services."

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